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People 'not better off' on welfare

Thu, Oct 13, 2011, 01:00

CHARLIE TAYLOR

New research shows that unemployed people do not earn more from being on social welfare than by taking a job.

The study from the Economic and Social Research Institute (ESRI) finds that as many as 8 out of 10 unemployed people would increase their income by at least 50 per cent if they were to find employment.

Two-thirds of unemployed people would more than double their income if they were to obtain a job, the research finds.

The study shows that only about 3 per cent of the unemployed would have a lower income if working than in signing on.

The analysis, which was published today, is based on the ESRI’s tax-benefit model, which uses a nationally representative sample of real people rather than selected examples. The model simulates the welfare entitlements and tax liabilities of each household in the CSO’s Survey on Income and Living Conditions.

The research also considered the impact of rent and mortgage supplements from the State on income levels but said that just 13 per cent of individuals on jobseekers assistance or benefit get these payments.

Study findings were released ahead of the ESRI's 14th "Budget Perspectives" Conference, which takes place in Dublin this morning.

The latest figures show the unemployment rate fell in September to 14.3 per cent, the first montly decline since the start of the year. However, the number of long-term claimants now stands at 183,399 – or 41.9 per cent of the total number of people on the Live Register.

Taoiseach Enda Kenny yesterday refused to be drawn on reports in The Irish Times earlier this week that the Government could cut €1 billion from next year's social welfare bill.

It is understood the Government is hoping to generate about half the potential welfare savings from a new clampdown on fraud but much of the remaining savings are expected to come from a substantial cut in the €500 million annual expenditure on rent supplements.